Egyptian Credit Products

Egypt is a country of over 80 million people and a strategic boundary for both global trade and the balance of power for all Mediterranean countries and Southern Europe.

If Egypt were to fail as a nation, it would have catastrophic consequences for Saudi Arabia, Jordan, Libya, Sudan, Ethiopia, and impact all of Southern Europe.

It is for this reason that Egypt MUST NOT FAIL. The World Order, as broken as it is, simply can not tolerate the loss of Egypt.

To this end, we seek credit opportunities in Egypt on the basis that the country will manage to hang together, just barely, through these trying times, as the remaining regional tyrannies transition from decaying Monarchies to more populist and regional forms of government.

5 Year Senior Corporate CDS Chart

The crisis became acute between late 2015 and did not begin to abate until the Egyptian Pound devaluation in November, 2016.

There are a few important catalysts that made spreads in Egypt decline so markedly.

Among them:

2016

World Bank direct involvement in Central Bank and Treasury operations of the Egyptian government, starting in Q1 2016.

Egyptian Government compliance with World Bank advice and directives: prepare to make Egypt investment-grade again, as manifested by the devaluation of the Egyptian Pound, which took significant political courage of Sisi’s administration.

2017

A commitment by all Western governments, especially the EU, to backstop the Sisi regime from collapse: this includes overt promises of and actual FDI.

Installment of massive CIA base in Sudan: this will help curb flows of insurgents, weapons, and other “free radicals” into Egypt, especially the restive Southern Egypt.

Renewed commitment by EU and US to stem Libyan-provenance radicals flowing from Libya into Egypt.